Emerging Stocks Advance as Tata Steel Rallies on EarningsJulia Leite, Maria Levitov and Anuchit Nguyen
Emerging-market stocks rose the most in two months, snapping the longest slide since 2006, as companies including Tata Steel Ltd. and Cia. Siderurgica Nacional SA reported earnings that exceeded analysts’ estimates.
The MSCI Emerging Markets Index added 1.2 percent to 991.77, halting a 10-day decline. Brazil’s Ibovespa drove gains among major equity gauges in the Americas, while benchmark measures from Turkey and Hungary climbed at least 2 percent. OAO Mechel, Russia’s biggest producer of coal for steelmakers, jumped 12 percent after tumbling 41 percent yesterday. Indonesia’s rupiah rallied the most in almost three weeks after data showed the nation’s current-account deficit narrowed.
Earnings in the MSCI Emerging Markets Index grew by an average 13 percent for companies that reported quarterly results, according to data compiled by Bloomberg. Janet Yellen, the nominee for chairman of the Federal Reserve, said she’s committed to promoting a strong economic recovery and will ensure stimulus isn’t removed too soon. More Americans than forecast filed applications for unemployment benefits last week.
“The view is Yellen is a dovish Fed member, and that we’re not looking at any type of tightening anytime soon,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC in New York, which manages over $1.5 billion, said in a telephone interview. “The jobless claims are another indication that bad news is good news.”
Today’s advance trimmed this year’s slump in the measure for developing nations to 6 percent. Energy, consumer discretionary and health-care companies posted the biggest gains among 10 industries, rising at least 1.5 percent. The broad gauge trades at 10.4 times projected earnings, compared with the valuation of 14.5 for the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund advanced 1.6 percent to $41.46. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, tumbled 8.9 percent to 21.
Brazil’s Ibovespa climbed the most in two months as companies from steelmaker CSN to retailer Lojas Americanas SA and B2W Cia. Digital gained after posting results that were better than analysts estimated.
The Micex Index added 1.6 percent as Mechel jumped the most since May 2010. OAO Gazprom, the nation’s biggest company, climbed 2.5 percent after saying profit surged 30 percent. The Borsa Istanbul National 100 Index rose 2.3 percent, led by Turkiye Garanti Bankasi AS. OTP Bank Nyrt., Hungary’s biggest lender, gained 3.4 percent as non-performing loans showed the first quarterly drop in five years.
Indian equities rallied, snapping the longest losing streak in three months, after the central bank predicted the current-account deficit will shrink from a record. Tata Steel climbed to its highest level since February. ICICI Bank Ltd. jumped the most in two weeks, helping an industry measure end its longest losing stretch in two years.
Indonesia’s rupiah strengthened 0.5 percent to 11,545 per dollar as of 4:06 p.m. in Jakarta, the biggest advance since Oct. 25, prices from local banks show.
The Shanghai Composite advanced after the benchmark index’s valuations plunged to the lowest level since August. Sichuan Changhong Electric Co. jumped 7 percent. Anhui Huilong Agricultural Means of Production Co. surged 4.1 percent after the Xinhua News Agency said Anhui province plans to allow farmers to sell their land. Shanghai Pudong Development Bank Co. paced losses for financial shares.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 340 basis points, according to JPMorgan Chase & Co.